Could you survive an acquisition?

Most anyone working as a community banker these days has a sense that change is in the air.

How much of this is a justified concern on the stability of your employment?

Are you vulnerable—and if so, why? And what can you do about it?

Lending is not going to disappear, though how it will be done and the sorts of skill sets valued to accomplish it are evolving.

In fact, the numbers of lenders in both absolute numbers and relative proportions may actually increase over time. However, that’s scant consolation. Nor does it necessarily translate into more job security for those working in small banks that are candidates for acquisition by larger institutions.

What risks do you face regarding future employment, and what can you do about it?

What are the risks?

Here are the three categories of lending career risks that I see. They tend to cluster around factors more commonly present at banks at the smaller end of the size spectrum.

1.Narrower product lines and product offerings that don’t prepare you for life in a larger bank.

Smaller banks are often limited in their resources relating to their ability to fund large-dollar credits. Their lenders have often not had the opportunity to work on more complicated transactions as ranked by purpose, complexity, collateral, or specialized industry knowledge or familiarity.

2.Out of sight, out of mind, out of touch, out of … luck?

Another significant risk is that the staff of an acquired bank is simply not very well known (if at all) by the acquirer. There are only so many lending management jobs available and they usually go to those with proven track records.

What constitutes “proven” and how is that judgment formed?

This is often a subjective, frankly, formed by those who are the new owners, for better or for worse. I remember being in an analogous situation years ago as a young lender (with perhaps an impetuous nature as evidenced by what occasionally came out of my mouth) when I was summarily and curtly told:

“Remember, we acquired you.”

The bleak reality was that they didn’t know me, nor I them.

So how could they make a reasonable judgment up front on my worth and value as the good jobs in the merged environment were being filled?

In a few moments I will discuss solutions to this special challenge.

3.Too much capacity; not enough business. So, goodbye?

Sometimes there’s just too much human capacity for the current volume of business available. Many decent and capable lenders were squeezed out of the business since the Great Recession beginning in 2008 for just such reasons.

Hopeless? Not at all.

While you might not guaranty retention, there are always things you can do to improve your prospects of being a survivor.

Put yourself in the acquirer’s shoes

To understand, and perhaps mitigate, all of these risks it’s useful to understand the various ways that an acquirer will likely analyze the combined capacities and resources of the new (combined) bank. What are the key inputs and how are they ranked?

• First and foremost in the process of assimilation of staffs is usually the specific recommendation of your present boss.

• Next is the statistical record—your credit losses as well as your documented successes as a business developer.

And don’t overlook the metrics of numbers of dollars (committed and funded) and numbers of relationships that are assigned to you.

Now, let’s consider how you can improve on your current “you.”

Do something constructive—today

Some of the following steps are actions, some are more a shift in attitude:

1.Keep yourself current

We have self-improvement options such as courses in accounting and finance at local colleges and continuing education opportunities through trade associations such ABA and RMA.

These days, more is always better.

2.Step forward and challenge yourself.

We also have to be ambitious within our banks and proactively seek more responsibility and more varied challenges.

How many of you have actually volunteered to take on problem asset work?

I did, many years ago. Though at the time I could hardly have understood the full import of that, it was the best thing I ever did from a career point of view.

3.Don’t forget the bottom line: We also have to be producers.

Staff members who generate business are among the most valued of bank staff members and are usually the last to be let go in a merger or during a business contraction.

“Production” means both loan volume and service charge income through the sales of products and services.

This seems so obvious. Yet why some lenders continue to resist the idea that they are “sales” people.

4.Develop and nurture customer relationships.

Relationship management can be an insulating factor too. If you’re handling a large number of accounts by dollar and number, you are probably more demonstrably productive than someone who does less by these measures. Take a little time to figure that out and get a sense of the relative value that you may bring to your current position. That can be a useful nugget of information on one’s resume too.

If you can handle more business, figure out how to expand your portfolio.

One way is to go out and “hustle” more business yourself.

But maybe there are other lenders with whom you work who are struggling with a heavy workload of a service-intensive nature and could use some help.

Why don’t you volunteer to lend a hand?

5.Don’t brag. But this is no time to be bashful about what you do and what you are.

And if you have an opportunity to “promote” your skills and accomplishments, find low key and socially appropriate ways to do that. To the extent that you can, make your self-promotion data driven.

6.Open your eyes.

You should also watch your peers and seniors. Figure out what makes someone stick out either more or less favorably from the rest of the crowd. Then, without being less than authentic to who you are, emulate what you admire and shun what you don’t.

7.Don’t be afraid to ask for help.

I can tell you first hand that those of us with gray hair are always flattered by a sincere request for help from a less-experienced staffer. Try it and see and then tell me about your experience.

There are no guarantees in life. Nor is life always fair.

But we can work at making our own “luck.”

And in this uncertain environment we should be working at full speed doing that right now.

Banking Exchange Contributing Editor Ed O'Leary, a veteran lender and workout expert, spent nearly 50 years in bank commercial credit and related functions, working with both major banks as well as community banking institutions. His last job before retiring was as the CEO of a regional bank headquartered in Alburquerque, N.M. He earned his workout spurs in the dark days of the 1980s and early 1990s in both oil patch and commercial real estate lending. O'Leary began his banking career at The Bank of New York in 1964, and worked at banks in Florida, Texas, Oklahoma, and New Mexico. He served as a faculty member and thesis advisor at ABA's Stonier Graduate School of Banking for more than two decades, and served as long as a faculty member for ABA's undergraduate and graduate commercial lending schools. Today he works as a consultant and expert witness, and serves as instructor for ABA e-learning courses. You can e-mail him at [email protected]. O'Leary's website can be found at www.etoleary.com.

In mid-2016 O'Leary's "Talking Credit" blog received a bronze excellence award for the Northeastern Region from the American Society of Business Publication Editors.